RISMEDIA

September 30, 2010

RealtyTrac, a leading online marketplace for foreclosure properties released its Q2 2010 U.S. Foreclosure Sales Report, which shows that foreclosure homes accounted for 24% of all residential sales in the second quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 26% below the average sales price of properties not in the foreclosure process—down slightly from a 27% average discount in the first quarter.

A total of 248,534 U.S. properties in some stage of foreclosure—default, scheduled for auction or bank-owned (REO)—sold to third parties in the second quarter, an increase of nearly 5% from the previous quarter, but still down 20% from the second quarter of 2009.

“While foreclosure sales increased in the second quarter, non-foreclosure sales increased even more, spurred on by the home buyer tax credit that expired during the quarter,” said James J. Saccacio, chief executive officer of RealtyTrac. “That had the net effect of lowering foreclosure sales as a percentage of total sales during the quarter, but that may be a temporary dip as the removal of the tax credit could drive more buyers back to discounted short sales and REOs.”

Foreclosure sales by type in second quarter
A total of 151,290 bank-owned (REO) properties sold to third parties in the second quarter, up 3% from the previous quarter but down 28% from the second quarter of 2009. REO sales accounted for nearly 15% of all sales in the second quarter, down from nearly 19% of all sales in the previous quarter and down from nearly 20% of sales in the second quarter of 2009. REOs sold for an average discount of nearly 35%, close to the average discount of 34% in the previous quarter and also to the average discount of just over 35% in the second quarter of 2009.

A total of 97,244 pre-foreclosure properties—in default or scheduled for auction—sold to third parties in the second quarter, up nearly 8% from the previous quarter but down 3% from the second quarter of 2009. Pre-foreclosure sales accounted for 9% of all sales, down from nearly 12% of all sales in the previous quarter but nearly identical to the 9% of all sales in the second quarter of 2009. Pre-foreclosure sales, which are often short sales, sold for an average discount of nearly 13%, down from an average discount of nearly 16% in the previous quarter and down from an average discount of 19% in the second quarter of 2009.

Nevada, Arizona, California post highest percentage of foreclosure sales in second quarter
Foreclosure sales accounted for nearly 56% of all sales in Nevada in the second quarter, the highest percentage of any state despite a decrease in foreclosure sales from the previous quarter and from the second quarter of 2009. Nevada pre-foreclosure sales jumped 29% from the previous quarter and were up 2% from the second quarter of 2009, but Nevada REO sales decreased 14% from the previous quarter and were down 43% from the second quarter of 2009.

Arizona foreclosure sales accounted for 47% of all sales in the second quarter, the second highest percentage of any state. Pre-foreclosure sales in Arizona increased 9% from the previous quarter and 15% from the second quarter of 2009 while REO sales increased 15% from the previous quarter but were down nearly 34% from the second quarter of 2009.

Foreclosure sales accounted for 43% of all sales in California in the second quarter, the third highest percentage among the states. California pre-foreclosure sales increased nearly 8% from the previous quarter but were down 4% from the second quarter of 2009. California REO sales increased 1% from the previous quarter but were down 45% from the second quarter of 2009.

Other states where foreclosure sales accounted for at least one-quarter of all sales were Rhode Island (37%), Massachusetts (35%), Florida (34%), Michigan (33%), Georgia (27%), Idaho (27%), and Oregon (25%).

Ohio, Kentucky, California post highest foreclosure discounts
Ohio foreclosures sold for an average discount of nearly 43% in the second quarter, the biggest discount of any state. Ohio pre-foreclosures sold for an average discount of nearly 24% while the average discount on Ohio REOs was double that at nearly 48%.

With foreclosures selling at an average price that was 41% below the average sales price of non-foreclosure properties, Kentucky posted the nation’s second highest average foreclosure discount in the second quarter. Kentucky pre-foreclosures sold for an average discount of 27%, and Kentucky REOs sold for an average discount of 48%.

California foreclosures sold for an average discount of 39% in the second quarter, the third-highest discount among the states. California pre-foreclosures sold for an average discount of 29% and California REOs sold for an average discount of 46%.

Other states with average foreclosure discounts of more than 35% were Michigan, Tennessee, Pennsylvania, Georgia, Illinois and Iowa, along with the District of Columbia.